The Importance of Family in Succession Planning

Written by Dan Keeley

Focusing on Family Wealth and Successful Succession

Understanding what truly matters in family wealth and being a successful family is an invaluable exercise. It sets a clear path for enjoying life, making risk-appropriate investments, and ensuring tax-efficient and purpose-fit structures. Equally important is learning the right way to conduct family meetings and adopting a governance model that fosters open conversations and shared accountability.

The Role of Purpose in Succession Planning

Clarifying the purpose of your family’s wealth is crucial, especially when approaching succession planning—a task that often causes families to procrastinate. A thorough review leads to a plan with clear solutions, addressing questions like “what if…?” and providing assurances about the “who,” “what,” “when,” and “how” of wealth transfer. This ensures you’re meeting your responsibility to pass on stewardship effectively.

Why Families Hesitate to Discuss Succession

What makes people uneasy about discussing succession? Why do they delay decisions with long-term impact? And why do some prefer to leave it to the family to sort out after they’re gone? These are complex questions because succession isn’t just about money or property; it’s about confronting family relationships. It demands an emotional commitment to a process that must run its course once started. Finding solutions involves discussing fairness, equity, who counts as “family,” and their capabilities for current and future roles—often challenging conversations in uncharted waters.

Key Questions for Family Succession Planning

• How did our family build its wealth?
• Are these origins still significant to us, or have we moved away from them?
• Do we want to maintain and manage our wealth as a united family across generations?
• Or does each family branch prefer to start fresh, valuing independence more?
• Are we prepared and committed to achieving our succession goals?
• Who do we trust to oversee our succession plan?
• What family governance model will best support our intergenerational planning?

Control and Management of Family Wealth

Perhaps the most significant concern is who controls the transfer and management of family wealth. Choosing family members to fill roles as trustees, directors, or executors often requires a reality check on the next generation’s dynamics and whether the wealth pool will be subdivided. Family council meetings can expose your family to big decisions, observing individual strengths and weaknesses, fostering respect for differences, and ensuring smart decisions about investments, distributions, and philanthropy.

The Role of Family Governance

A formal approach to family governance allows members to learn and deliver the purposes of family wealth in a controlled environment. Addressing investment risk, asset protection, and distribution preferences prepares them for future roles. At MASECO, we’ve seen how this enables families to make informed decisions about who should manage their succession plans.

Confronting the Biggest Issues

One of the biggest challenges is determining what will bind the family after the current generation is gone. There is no right or wrong approach, but underlying dynamics and implications must be explored, and solutions must reflect your family’s reality.

 

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The Legal Stuff

MASECO LLP (trading as MASECO Private Wealth and MASECO Institutional) is established as a limited liability partnership under the laws of England and Wales (Companies House No. OC337650) and has its registered office at The Kodak Building, 11 Keeley Street, London, WC2B 4BA.

MASECO LLP is authorised and regulated by the Financial Conduct Authority for the conduct of investment business in the UK and is registered with the US Securities and Exchange Commission as a Registered Investment Advisor.